Recently I was talking to an entrepreneur that has spent $350,000 so far building stuff for his startup but nothing related to customer acquisition. This includes a visual brand identity, website, web app, and native mobile apps for Android and iOS. Now, during our conversation, I wanted to learn about his metrics. After mentioning that they haven’t signed any customers yet because they’re polishing the product, and therefore didn’t have any metrics yet, I asked about his go/no-go metrics to continue on with the idea. Meaning, what are his near-term goals, with specific metrics, to know if they’re making enough progress to keep moving forward. His answer: I don’t know.
Here are a few thoughts on go/no-go metrics for startups in the earliest of stages:
- While it’s easy and fun to build product, make a plan, with goals, and include aspirational metrics as well as “must hit” minimum metrics
- Consider goals related to identifying if product/market fit has been achieved
- Ask existing and potential investors what metrics they look for and would require for a subsequent round of funding
Too often, entrepreneurs don’t have metrics in mind when they’re starting out and get caught up in the grind without a target in sight. Also, remember the 3:1 customer acquisition to engineering spend ratio when budgeting in the early days as too many entrepreneurs spend all their money on the product and forget that they need even more money to acquire customers.
What else? What are some more thoughts on go/no-go metrics for continuing on with a startup?